Open Access Renewable Energy Consumption Can’t Be Offset Against RPO in Another State

The Haryana Electricity Regulatory Commission (HERC) has dismissed a recent petition filed by Shree Cement Limited. The petitioner wanted the state regulator to allow renewable energy consumption at its Karnataka cement plant to offset its renewable purchase obligation (RPO) against open access energy consumed at its cement unit in Haryana.

The Commission noted that to offset renewable energy generated in one state against the renewable energy obligation in another state is not viable. However, the Commission noted that Shree Cement was eligible to sell renewable energy certificates (RECs) sourced from the renewable energy captive generating project in Karnataka. The Haryana unit can purchase the RECs from the exchange for its RPO compliance.

Further, the Commission said that to encourage private sector participation, the state government’s HERC regulations and policies provide an adequate opportunity for private entities to generate power from renewable sources in Haryana.

Context


Shree Cement Limited has a cement plant in the Panipat district of Haryana. Shree Cements meets parts of its power requirements by purchasing power through the Indian Energy Exchange (IEX) under open access.

Being an obligated entity, the company has to meet the RPO target for its power consumption under the open access arrangement. To fulfill the RPO target, the company purchases both solar and non-solar RECs. It had purchased 30 non-solar and 40 solar RECs to meet the RPO target for 2018-19.

The company also has a cement plant in the Kalburgi district of Karnataka. Shree Cement had also commissioned a wind power project of 21 MW capacity in 2018. Its cement unit in Karnataka is consuming the renewable energy generated by this project under a wheeling and banking agreement (WBA) executed between Shree Cements, the Gulbarga Electricity Supply Company (GESCOM), and the Karnataka Power Transmission Company Ltd. (KPTCL).

The consumption of renewable energy against RPO on account of energy purchased and consumed under open access at the two cement units (Haryana and Karnataka) was more than the respective states’ RPO limits.

In its submission, Shree Cement said that the consumption of excess renewable energy at the cement unit in Karnataka should be counted as compliance of RPO against conventional energy consumed through open access in the cement unit in Haryana.

This implied that the consumption of wind energy by the company’s unit in Karnataka should be accounted for the fulfillment of the non-solar RPO of its unit located at Panipat.

The state regulator noted that the energy generated from the renewable energy captive project in Karnataka and self-consumption is not verifiable unless the captive project is registered with the central agency.

The Commission noted that Shree Cement could sell the RECs sourced from the Karnataka unit separately, and the Haryana unit can purchase those for RPO compliance.    

In July this year, HERC dismissed the petition filed by Shree Cement Limited and said that the net metering facility would not be provided to open access consumers. Shree Cement had filed a petition before the Commission for permitting the use of both net metering facility and open access.

Earlier, Mercom reported that Haryana imposed an additional surcharge on the purchase of open access power. The open access segment in India has remained underutilized on account of inconsistent and unsupportive state policies. Read all about India’s solar open access segment here.